During the COVID-19 years of 2019, 2020, and 2021, the U.S. Congress passed legislation such as the Paycheck Protection Program (PPP) which expired in May 2021, and the Employer Retention Tax Credit (ERC), which expires next April 15th, 2025. Much less widely known is a Tax Credit designed to help workers who are Self-Employed Individuals as well as Self-Employed Couples who filed jointly, Sole Proprietors, and single-member Limited Liability Corporations (LLCs) that file an IRS Form 1099, and submit a Schedule C and/or Schedule SE that is still available until April 15th, 2025. This Tax Credit has come to be known as the Self-Employed Tax Credit (SETC), and can yield up to $32,220 for Self-Employed Individuals and up to $64,440 for Self-Employed Couples.
The SETC came about as part of the Families First Corona Virus Response Act (FFCRA) which paid taxes in either 2021 and/or 2021 that missed work in any manner during COVID. For example, most States and Localities imposed Government Stay-At-Home orders during COVID. This included Schools where parents were forced to stay home because their kids under 18 years of age were not allowed to go to school. Similarly, some hair stylists and barbers were mandated to stay closed, and restaurants were also mandated in some locales. Eligibility for the SETC also included anyone who had to stay home due to having symptoms of COVID-19 or having the disease itself. Or, having to stay home to take care of a family member, neighbor, or loved one.
The problem with the SETC is that most people have never heard of it before, because it did not get the publicity of the ERC. Another problem is that regular Accountants are generalists; not, specialists. Think about it. If you make your living as a Plumber and yet have never gotten money from the SETC, it means that your Accountant did not know about it and/or did not know how to analyze and calculate the correct SETC amount to file to the IRS themselves. When you go to the Doctor, if you have a foot problem, they refer you to a foot doctor who is a Podiatrist. Tax accountants and Tax attorneys are specialists; not generalists. However, they are expensive. The solution is identifying a Tax Credit Accounting firm that bills you on the money they already put in your pocket.
In other words, why would you not want to hire an Accounting Firm that says to you, “We will go out and do all the work, and file all your paperwork with the IRS. And, only after you receive your SETC refund check from the IRS will we bill you are fee, which you will pay us from the money we put into your Bank Account.” In seeking out an Accounting Firm that offers SETC, finding one that offers electronic filing allows them to obtain authorization to be able to pull the 2019, 2020, and 2021 Tax Returns on behalf of Clients. This removes the burden of having the hassle of taking the time and effort to manually get those documents to the Tax Credit Accountants.
The interesting thing about the SETC Tax Credit is that even if someone has received Tax Credits from the PPP or the ERC, they still can be eligible for the SETC. As the money allocated for the SETC was funded by the Government is on a first-come first-served basis, it is to all eligible individuals who believe that they qualify to submit their SETC claim at their earliest opportunity. Procrastination can be expensive!
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